President Donald Trump’s implementation of tariff plans has raised concerns about potential price hikes for consumers. Duleep Rodrigo, U.S. consumer and retail sector leader at KPMG, explains that immediate impacts are likely to be seen in categories like food, where price increases are typically passed on directly to consumers.
On the other hand, products such as household goods may experience a more moderate impact, with manufacturers or retailers potentially absorbing some of the price increases.
Rodrigo notes that in the current economic climate, retailers are cautious about passing on full tariff-driven price hikes to price-sensitive consumers.
While consumers may not have direct control over prices, there are strategies they can employ to mitigate the impact on their finances.
Here are some tips for adjusting shopping habits in a tariff-driven environment:
1. Be Prepared for Price Increases
Having a budget is essential during times of uncertainty. Money-saving expert Andrea Woroch recommends creating a budget to gain more control over spending and counteract the effects of tariffs.
Woroch emphasizes the importance of tracking expenses and allocating funds to different categories to adjust for potential price increases. Additionally, setting aside money for emergencies can help cushion the impact of rising prices.
2. Comparison Shop and Look for Discounts
To stretch your dollars, smart shopping expert Trae Bodge recommends seeking out sales, comparing prices, and utilizing coupon websites for discounts and cash-back offers. Using a rewards credit card can also help maximize savings.
Consider purchasing refurbished items from certified retailers for consumer electronics and appliances. Shopping on resale websites can also provide cost-effective options for gently used items.
3. Avoid Impulse Purchases
Behavioral finance expert Meir Statman advises against rushing into large purchases due to tariff-related price hikes. Instead, he suggests evaluating the necessity of the purchase and avoiding unnecessary expenses.
By staying mindful of prices and only buying what is truly needed, consumers can navigate the effects of tariffs more effectively.